You might hear the story about the meeting between ex-CEO of UBER, Travis Kalanick, with Tesla’s CEO, Elon Musk, about potential partnered program… and … Elon Musk blew the meeting out in a nicer way of telling Travis Kalanick that each company should just focus what they do the best. So … what’s the scheme behind that statement of “better focus on what each company does the best?” … It’s basically saying that we aren’t going to partner up with you because we have a better chance to replace you in a foreseeable future (if everything goes according to the plan). Well… for most of you, you might still in the mist… feel puzzled… so … we are going to walk you through that.
If you are interested about the UBER & TELSA story, you can dig a bit deeper from “Business Insider” article – Uber once offered to partner with Tesla on self-driving cars — but Elon Musk said no”
UBER Is Dominating on Ride-Hailing Industry (at least in the US anyway)
There is no doubt that UBER is the KING of the Ride-Hailing industry despite all those roller coaster rides in the past year or two (… eventually caused the shuffle of the managements). All those #deleteuber movements did make dents on UBER but really weren’t enough to sink that big monstrous ship. Sure… Lyft is (or was?) coming and Lyft has been making so much buzz lately (with all those funds raised … e.g., Google led a $1 billion investment in Lyft)… All of those … DON’T MATTER… because … the gap (in the US) between UBER and Lyft is just too big to be filled.
Let’s take the number of rides per day to start with. UBER reached 5.5+ million rides daily about a year ago and, at the same period, Lyft was about 1 million rides daily. In some cities, the difference of daily requests is more than 10 times (e.g., 10 plus UBER requests vs. 1 Lyft request). The obvious dominance is what keeps UBER extremely valuable albeit all those negative news which caused the top management role change.
UBER Is Losing $ Still
It’s really hard to comprehend why UBER is still losing money. It brought in more than $37 billions (yes… with a “B”) in 2017… but it’s still losing money. Well… just put compensate drivers aside since … drivers are the ones who put labors, equipments, maintenance … well… everything to provide services … of course they need to earn incomes. So … according to UBER… after all the drivers incomes deducted from it’s P&L, it’s still have more than $7 billions in the bank … and … they are still losing $. Why? The aggressive business model which is “to win it all globally”.
UBER Can Still “WIN IT ALL”?
If UBER keeps their “first mover advantage” intact and stay on the #1 seat of the market share. Also … the difference between the #1 & #2 must be huge… it might still be able to win it all when the self-driving vehicles get approved and being put into each and every street of the United States… Wait…. it seems like that, right? But … is it really going to be like that? The ‘self-driving’ regulation will put UBER on the absolute top? The answer is … “NOOOOOO”.
UBER’s Biggest Advantage is – “Drivers”
“Demands” & “Supplies”… it’s this simple. Uber is dominating because they can meet the demands… there are way more Uber drivers than Lyft (or other small ride-hailing platforms’) drivers out there each and every single day. Ask yourself if you cannot get rides even if the rate is better from Lyft, will you use Lyft? Or … you will just use the most convenient platform to get you from point A to point B? Of course, we would choose the one which is more convenient. After all, ride-hailing services are aiming to make our lives easier not harder.
So … think about it if the “self-driving” vehicles regulation gets passed and … suddenly … any players can put as many cars out there on the streets as they want, will Uber still be the champion? A BIG FAT “NO”. Consumers will just simply pick whichever they feel cheaper (or better) ones and jump right in it to travel. The name “UBER” might be walking towards to the history book directly right after.
Lyft Will Benefit from Self-Driving Regulation
Certainly, Lyft will be benefiting from it if the laws allows self-driving vehicles on the street for the ride-hailing services. The only weak point (fighting with Uber) would be simply eliminated right away. Uber will no longer a formidable competitor because … put the biggest asset (drivers) Uber has aside, Lyft is capable of taking over the throne anytime. … Wait… but … is it so? Lyft is the biggest threat for Uber?
Tesla Is The Real Threat To Put Uber Down
If … if … if the self-driving vehicle regulation really gets passed on the ride-hailing industry, Tesla might be the LAST ONE STANDING (& smiling). Why? Think about it… Tesla already built their brand reputation not only in the US but worldwide. It’s the Apple of the “car” industry. In addition, think about it … how many Tesla cars are already out there on the streets? If the law gets passed and Tesla makes a breakthrough on its (long standing) mass production problem… then … “Tesla”, for sure, will be the last one standing & smiling on both electric car industry and ride-hailing industry. The followings are the WHYs consumers will choose Tesla over other players,
1) Brand recognition & reputation 2) Tesla fleet will be everywhere 3) Tesla owners will make $ too
Did you see the reason #3? If you own a Tesla car, you will be able to make $ while you aren’t using your vehicle. Let’s say that your Tesla drives you to your office in the morning at around 9am and you don’t need a ride until about 4:30pm that day. Tesla platform will be able to put your car into use for those hours that you don’t need it. It turned out to be “free $” especially all of your maintenance are free from Tesla. So… basically, you own a car which can give you a ride when you need … also … can make you money when you don’t use it. How awesome is that? ^_^
This fight is far from over since the regulation of the self-driving vehicles isn’t going to be passed anytime soon especially on the ride-hailing industry. Right now… the most important thing for Uber is to hold its leading position which is really a huge lead than any other players in the United States (different story in other continents though). However, Tesla is in a position to take over once the self-driving vehicles regulation is in place – “A Grand Plan To Take The Throne From Uber”.